Is student covered by parents’ policy?

In February 2003, Alexandra Waldron was a passenger on a motorcycle when the motorcycle struck an automobile that crossed into its lane. Alexandra sustained serious injuries. At the time of the accident, Alexandra was a 22-year-old college student. Her father, William Waldron, had a New York Central Mutual Fire Insurance Company auto policy with supplementary uninsured/underinsured motorist (SUM) coverage of $300,000 that he had purchased through Knox Insurance Agency, Inc. Alexandra was not listed on the policy as a member of the household.

In late April 2003, William contacted the Knox agency to inform it of the accident, but he indicated that he did not want to file a claim with New York Central at the time. In July, Waldron advised Knox to go ahead and file a claim. New York Central denied the claim, stating that notice of the claim was untimely and that Alexandra was not an insured under the policy. The Waldrons filed a declaratory judgment action asking the court to find that Alexandra was entitled to coverage and alleging negligence and breach of contract on the part of the insurer and agency. The lower court found in favor of the defendants; the Waldrons appealed.

On appeal, the Supreme Court of New York, Appellate Division, addressed the issue of whether Waldron’s April communication constituted timely notice. The New York Central policy required that notice of an accident be given as soon as reasonably practicable, but no more than 30 days after the accident absent proof justifying the delay.

At the time of the accident, Alexandra was in Florida and William Waldron was at home in New York. Alexandra’s injuries were very serious, and William immediately left New York to be with her in Florida. Two months later she was still in the hospital, and there was concern that she might lose a leg. The court found that there was sufficient evidence to raise a factual issue as to whether the delay was justified under the circumstances.

The supplementary uninsured/underinsured motorist provision of the policy required notice of a claim “as soon as practicable,” which meant “with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured [or uninsured].”

The court noted that, on the police report, the section for the automobile driver’s insurance information was blank and that the absence of this information could constitute notice of a potential supplementary UM/UIM claim. The court also stated that, even if this notice did not constitute notice of a potential claim, New York Central did not establish that it was prejudiced by the delay.

After establishing that there was enough evidence to support a finding of a factual issue as to notice, the court addressed New York Central’s argument that Alexandra was not covered under the policy because she was not a resident of her parents’ household at the time of the accident.

The court was not persuaded by the insurer’s argument. Although Alexandra rented an apartment on campus, she maintained a bedroom in her parents’ home, kept clothing there, and visited on weekends and holidays. Her parents’ address was considered to be her address for voting and tax purposes, and the college used her parents’ address as Alexandra’s permanent address. The court concluded that this evidence could support a finding that Alexandra was a resident of her parents’ home at the time of the accident.